The initiative goes some way to meeting the desire of Hispanic communities for a so-called Dream Act that would grant young undocumented Latinos a pathway to citizenship. Photograph: Mario Tama/Getty Images

The Obama administration has announced a dramatic move to placate the rising anger of Hispanic communities across America by offering a partial Dream Act to young law-abiding immigrants without documents who will now no longer live under the threat of deportation and will have the right to work.

The move will take effect immediately and could have an impact on 800,000 young immigrants, largely Hispanic, who came to the US as children and though hard-working and law-abiding have lived for years under the shadow of deportation.

The department of homeland security said that those who demonstrate that they meet the criteria will be eligible to be taken off the deportation list for a period of two years, subject to renewal, and will be eligible to apply for work authorization.

"Our nation's immigration laws must be enforced in a firm and sensible manner," said the secretary of homeland security, Janet Napolitano. "But they are not designed to be blindly enforced without consideration given to the individual circumstances of each case. Nor are they designed to remove productive young people to countries where they may not have lived or even speak the language. Discretion, which is used in so many other areas, is especially justified here."

The initiative goes a large way to meeting the desire of Hispanic communities for a so-called Dream Act that would grant young undocumented Latinos a pathway to citizenship. It promises to be a significant measure in an election year in which Latino voters could prove crucial in key swing states – some 500,000 new voters are created every year when legal Hispanic youths turn 18.

The breaking news of the change in policy was received ecstatically by Latino and progressive organisations. "This is a bold move, a smart move by the White House. It relates to the most decent, innocent undocumented folks in this country and we applaud the president's initiative," said Angela Kelley, an immigration expert at the Center for American Progress.

The new deal will be open to anyone who:

• came to the US before the age of 16 and is under 30 years old;

• have continuously resided in the United States for a least five years preceding the date of this memorandum and are present in the United States at the moment;

• are currently in school, have graduated from high school, have obtained a general education development certificate, or are honorably discharged veterans of the Coast Guard or Armed Forces of the United States;

• and have not been convicted of any crimes or significant misdemeanours.

The one aspect of the Dream Act that is yet to be achieved is the right to citizenship or permanent residency for young undocumented immigrants.

Kelley said that the battle for that reform would continue. "We need Congress to step up and finish the job," she said.